HELENA – Democratic Gov. Brian Schweitzer is siding with the oil and gas industry in its fight against federal drilling regulations that some say could devastate Montana’s economy.
The Bureau of Land Management, a bureaucratic subsidiary of the U.S. Department of Interior, is eyeing new regulations for hydraulic fracturing, commonly known as fracking, on all federal land nationwide.
Fracking is the process of pushing a chemical mixture thousands of feet below the earth’s surface to break apart geologic formations to release oil and gas. Most of the chemical compound returns to the surface, along with the fossil fuels.
U.S. Department of Interior Secretary Ken Salazar said his agency wants national uniform standards for safety’s sake.
“There are some who are saying that it’s not something we ought to do; it should be left up to the states. That’s not good enough for me, because states are at very different levels. Some have zero, some have decent rules,” Salazar said in a June 25 Reuters interview.
Others, including Schweitzer, say the rules would be redundant, onerous and burdensome.
“While I can appreciate BLM’s role in regulating industry activities on public land, I believe BLM is well advised to accept the regulatory process developed by each state and limit implementation of a new regulatory scheme to the jurisdictions and states that have not already adopted rules,” Schweitzer wrote in a June 18 letter to Salazar.
BLM rules could be in place by year’s end and would force additional disclosure and testing changes for drilling companies.
The public comment period on the rules was slated to close July 10, but was extended two months after industry officials requested more time to review the regulations.
So far, oil and gas companies don’t like what they see.
Dave Galt, executive director of the Montana Petroleum Association Inc., a trade nonprofit that represents oil and natural gas producers, said the new rules are designed to regulate oil and gas companies out of business.
“It’s horrendous what the administration is doing to the oil and gas industry,” Galt said.
The state regulates fracking through administrative rule and the federal government has a compact to abide by those regulations.
Galt warns that adding a new layer of red tape, even if only on federal land, would drive business out of the state.
“It’s just an example of too much government and some people not having enough to do,” Galt said.
Environmental groups, including the Sierra Club, Northern Plains Resource Council and Montana Environmental Information Center, have fought against fracking, because they say the fluids used in the process are dangerous to human health and can contaminate drinking water.
On MEIC’s website, the group lists four chemicals used in fracking known to cause health problems in humans, including heart issues, blindness and dizziness. Other chemicals, the group said, are harmful to some animal life.
Derf Johnson, an MEIC analyst, said all drilling operations need to go to great lengths to guarantee the safety of drinking water and applauds the new federal rules – mostly.
“They are a step forward in addressing the rules we’ve seen with fracking,” Johnson said Tuesday morning. “We need to proceed with extreme caution.”
Johnson sees a gap in the new federal rules in that they don’t require companies to inform adjacent landowners of fracking operations, thus denying the opportunity for pre-fracking water testing. That testing is critical, Johnson said, because it provides a baseline for post-fracking contamination tests.
The state rules aren’t good enough either, Johnson said, because drillers can hide fluid combinations, if the information is deemed “proprietary.”
“It’s a loophole you can drive a truck through,” he said.
But Schweitzer and Galt fired back against environmentalists’ claims that fracking is tainting the water supply.
“We have had no cases of groundwater contamination reported, discovered, or even suspected,” Schweitzer wrote in his Salazar letter.
“The facts just aren’t there,” Galt told Watchdog.org on July 2.
Carl Graham, president of the Bozeman-based Montana Policy Institute, a free market think tank, said the anti-fracking push is simply an effort by environmental radicals to cut off access to cheap energy.
“More than 99 percent of the fluid used is water and sand,” Graham said of the fracking fluid.
While Graham pushes for the fossil fuels fracking provides, he’s also concerned with the economic slowdown the state would experience, if federal regulations scare off drilling companies.
“It’s a huge tax hit, if we shut it down,” said Graham, who is also publisher of Montana Watchdog.
Fracking has unlocked Bakken Formation drilling development in eastern Montana and western North Dakota. Galt said fracking is cheaper than conventional drilling and allows wells to turn a profit.
“Everything going on in Bakken would not happen without fracking,” Galt said.
Drilling, fracking included, is big business for Montana, particularly in the state’s eastern slice.
Galt said the federal red tape could affect as many as 12,000 workers. Natural gas wells provide more than $53 million in royalty payments to the state and federal governments.
The industry as a whole, Galt said, generates more than $9 billion in economic activity for the state annually.